Gov. Wes Moore (D) during a hearing last month.(Photo by Bryan P. Sears/Maryland Matters)
Gov. Wes Moore (D) made good on a promise to restore funding for the Developmental Disabilities Administration in a supplemental budget Tuesday, but those fund came at the expense of clean energy projects, state employee raises and other cuts.
The $360 million budget also delays implementation, for another year, of the Family and Medical Leave Insurance program, which was part of the $117 million in cost reductions included in the package.
The big winner in the shuffling of funds was the DDA, which Moore’s initial budget would have cut by $200 million by the end of this fiscal year. But an outcry from advocates rallying against his proposal led the administration to reverse course and scramble to find funds for the administration, which funds services for people with developmental disabilities.
But even after all those cost cuts and fund shuffling, the supplemental budget does not address the more than $450 million cut to the DDA that is still scheduled for fiscal 2026.
“We’re grateful that the governor issued the supplemental to address that (fiscal 2025),” said Laura Howell, CEO with Maryland Association of Community Services. “Obviously that doesn’t help with the $457 million cost containment for FY ’26. So that’s still a big priority we need to work on.”
The supplemental budget is a regular part of the negotiation process to balance the state’s budget, and shuffles money around to adjust the governor’s budget after state analysts have combed through the details of the initial proposal. But this year, with the state facing estimated $3 billion budget shortfall, advocates, lobbyists and lawmakers are watching every dollar with a keen eye.
Moore unveiled the supplemental budget days before the Board of Revenue Estimates is scheduled to deliver the final revenue projections lawmakers will use to guide budget deliberations. Multiple sources tell Maryland Matters the panel will announce that revenues are expected to be a total of up to $300 million less for the current fiscal year and fiscal 2026 combined.
Moore’s supplemental budget does not appear to address BRE’s expected announcement.
The supplemental budget does include reductions to raises for some state workers. Administration officials said all 52,000 state employees will receive a 1% cost of living adjustment for fiscal 2026, but that only represented, union employees can qualify for merit-based wage increases or step increases in 2026.
This policy change is expected to save the state $37 million, but means that some 12,000 employees would not be eligible for raises above teh standard 1% cost-of-living increase. State officials say that the ineligible workers are primarily managers, executives and special appointment personnel, along with some staff at certain agencies that are excluded from bargaining.
Moore’s supplemental budget also lops off $80 million that from the $180 million that was originally planned for efforts to boost clean-energy projects across the state.
That $180 million would have doubled this year’s allocation for the Strategic Energy Investment Fund. The lower $100 million investment would still be a $10 million increase from fiscal 2025. The remaining $80 million will be diverted to the general fund under the supplemental budget.
The budget also shuffles funding for the Family and Medical Leave Insurance (FAMLI) program, which was supposed to begin collecting funds this year but will likely be delayed by 18 months amid the state’s challenging budget year. By delaying the FAMLI start date, the state will be able to save some $15 million in the next fiscal year that initially would have used to increase provider rates in anticipation of the increased medical needs available under the FAMLI program.
The supplemental still adds $37 million to the FAMLI program in fiscal 2026 so the Department of Labor can continue to prepare for the program by its new proposed start date in January 2027. The supplemental budget taps into the local state income tax reserve, which administration plans to pay off in three or four years, to support the FAMLI funds.
Most of the proposed cuts are in service of restoring money to the DDA, as Moore’s initial proposal to slash funding for the agency by $200 million in fiscal 2025 to counter unsustainable program growth, a move that has been widely unpopular.
The supplemental budget actually increases funds for the DDA, due to increasing costs at the agency. For fiscal 2025, the supplemental provides $143 million, and provides $154 million for fiscal 2026 in general funds — which would then be boosted by federal match dollars.
The supplemental budget assumes that Moore’s controversial proposal to reform the state’s income tax that would bring in around $65 million for the state, assuming it is approved by the legislature. Administration officials say those funds would help offset the funding for the DDA in fiscal 2025..
The initial proposed budget accidentally cut funding to the state’s Register of Wills offices through the proposed elimination of the state’s inheritance tax, the main source of funds those offices. But the supplemental budget now funds the state’s registers of wills by $15 million next fiscal year.
The supplemental budget also carves $9 million to help brace for a surge in unemployment requests due to federal layoffs — including $7 million just to ensure that there is enough staff to manage the anticipated increase in requests. In a similar vein, the supplemental calls for $2 million toward a recently announced program to help expedite the hiring of laid-off federal employees into vacant state positions.
The administration said it continues to work with providers, advocates and lawmakers on “proposed alternatives” to the fiscal 2026 cuts that are still on the table, which include reductions in certain wage bonuses for providers and personal staff among other measures.
“Our advocacy is far from done,” Howell said.